Tiger Global has secured $2.2 billion for its most recent venture capital fund, a significant achievement albeit falling short of its initial $6 billion target set when the fund was announced in 2022.
The firm has been a notable player in the venture capital landscape, particularly during the peak of the venture boom in 2021, demonstrating a strong track record of investing in private technology start-ups.
Based in New York, Tiger Global raised a substantial $12.7 billion fund in 2021, positioning itself as a major player in the industry.
Over the years, Tiger Global has built stakes in prominent companies such as TikTok’s parent company, ByteDance, the fast-fashion giant Shein, and the popular payments platform Stripe, solidifying its position as a key investor in the tech and innovation space.
According to a Financial Times report, it started raising its 16th fund in October 2022 and had received commitments of about $2 billion by the middle of last year.
Tiger closed the fund last week with total commitments of $2.2 billion, according to a person with knowledge of the deal suggesting it received further commitments of just $200 million in the intervening nine months.
According to the report, the slow pace of fundraising shows how a turnaround in private markets has damped the appetite of institutional investors for allocating cash to risky venture capital investments in recent years.
Venture funding
Venture funding has fallen precipitously since the start of 2022. Rising interest rates have hit the valuations of private start-ups, forcing Silicon Valley venture capital firms to shift their focus from raising ever-larger funds to instead ensuring the survival of companies in their portfolios.
- “The market has completely changed in that time [since 2021],” said a person with knowledge of Tiger’s fundraising. “It’s a different time and different business. The focus is not ‘bigger is better’, it’s on performance.”
The last time Tiger raised a similarly sized fund was its 10th vehicle in 2015, which totalled $2.5 billion. Since then, the firm has raised a series of larger funds.
Scott Shleifer, the head of Tiger’s $30 billion-plus private equity business who was instrumental in the firm’s growth, announced late last year he would step down from his role at the hedge fund.
Shleifer was one of Tiger’s first hires and marshalled investments into booming Chinese technology companies, including e-commerce groups such as JD.com and Ctrip.com.
Shleifer’s departure was one reason that Tiger’s new fund did not close sooner, according to a person familiar with the process.
- “The fund hasn’t been marketed to investors in six months. [The long deadline] was to give people time to digest the Scott news,” they said.
Private investments
In an annual letter to investors, Tiger recently expressed optimism that its largest private investments, such as Stripe, software company Databricks and ByteDance, were “performing well and should have the opportunity to go public once markets are more accommodating.”
It also told investors that it intended to remain disciplined in its investment approach, waiting for ‘fat pitches’ to swing hard.